MTM Options Trader Newsletter - Know Your Option Delta Basics

[image]() [image] This Week in the Market With the debt ceiling crisis seemingly in the rear-view mirror, the market closed out the shortened week of trading in a very bullish fashion. The S&P 500 closed well above some resistance at the 4,200 level on Friday. As we head into next week, the market appears a tad extended. The S&P 500 is a fair distance from its 50-day moving average, let alone its 200-day moving average. A pullback of some sort could be a reality this week, but the market looks like it is aching to move even higher. Implied volatility has crept much lower, taking option prices with it. Although traders and investors will get a full week of market action, economic reports will be scarce with two of the five days having no significant releases on deck. The following week is the next FOMC meeting, and volatility is sure to be rampant again. Quarterly earnings continue to grind to a halt. Have a safe, healthy and happy week, and make some disciplined trades! Jun 5: Factory Orders Jun 6: Trade Deficit Jun 6: Consumer Credit Jun 7: Jobless Claims Jun 7: Wholesale Inventories [Read Our Blog]( Know Your Option Delta Basics Over the past several weeks, I have been working on writing my PowerPoint presentations for our annual option training retreat. Of course, I am reminded of several topics I need to focus on during the retreat but also in my daily lessons with traders. Management has always been priority number one for me, but I also put a great deal of focus on option delta. Let’s take a quick look. Option Delta There are several definitions of delta, and they are all very good. The one I’ll focus on here is that delta is the rate of change of an option based on the underlying. To keep it simple, for [Continue Reading ...](=) MTM Watchlist Here are a few trade ideas we will most likely look at in group coaching class this week: TSLA – This big guy looks like it wants to break out of its slump after a 2-bar close over its 200-day moving average. Additional bull calls and bull puts will be considered. IBM – Like the market, the stock shot up to close out the week. Unlike the market, however, it crashed into its 200-day moving average. Potential bear calls will be examined. NFLX – With the stock around the $400 level, calendars will be explored depending on early market action this coming week. Bull calls with a solid move through that area are on the table as well. [image](=) The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by emailing investorservices@theocc .com; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2023. All rights reserved. Reproducing or redistributing this content is a violation of federal law. [image] If you do not wish to be contacted via email, you can unsubscribe using this link: [Unsubscribe]( Unsubscribing from email notifications DOES NOT cancel your class, subscription or recurring payments. We recommend that current students do not unsubscribe from email notifications. If you unsubscribe from email notifications, you will not be notified on how to access the classes or subscriptions in which you are enrolled. Market Taker Mentoring, Inc. PO Box 117 Frankfort, Illinois 60423 United States